Geneva, March 29, 2011

A very good morning to you all. It is a great privilege for me to have the possibility to speak to you this morning. I should like to extend my thanks to the Commission and, in particular, to its Executive Secretary, Jan Kubiš, for giving me this opportunity. At the World Intellectual Property Organization (WIPO), we are very proud of our cooperation with the Economic Commission for Europe. I shall return to this cooperation a little later.

I wanted to speak to you this morning on the general topic of innovation. Innovation has been embraced by a number of world leaders as a way of overcoming and emerging from the Global Financial Crisis. I could refer, for example, to several speeches that have been given by President Obama in this regard, as well as to the speech that was given by President Medvedev at the opening of the Davos World Economic Forum this year, which focused on innovation and its role.

Innovation is central to economic growth and to the creation of new and better jobs. It is the key to competitiveness for countries, for industries and for individual firms. It is the process by which solutions are developed to social and economic challenges. And it is the source of improvements in the quality of all aspects of our material life. It is also the reason why we have intellectual property. Innovation and its many benefits do not come without the investment of time, effort and human and financial resources. Intellectual property provides the incentive for that investment by protecting the value that is added to production by intellectual capital. That value is the space in which all countries would like to compete. No one wants to compete on the cost of labor, and not everyone can compete on the basis of physical resources. In contrast, the value added by the intellect is a space that is available to all countries. This is why, for example, the Prime Minister of China, Mr. Wen Jiabao, says that intellectual property will constitute the basis of competition in the future.

The world of innovation is very much in transition. I should like to highlight, this morning, two features of that transition.

The first is the change in the geography of innovation. It is a dramatic change, which we have witnessed in the course of the last ten years, in particular. We now find that China is the second largest investor in the world, in absolute terms, in research and development (R%D). In 2008, China passed the United Kingdom in the number of international patent applications that it filed. In 2009, it passed France. And on that base, already larger than that of the United Kingdom or France, in 2010 the number of international patent applications from China rose by 56%. If you use patent applications as a measure of technology production -- and it is not a bad measure -- you would find that Japan, China and Korea account for 32% of world technology production, whereas Europe (the extended Europe of the European Patent Office), for example, accounts for 30% and the United States for about 28%.

These changes correspond, naturally, to broad demographic and economic trends. Statistics on demography and economic production show that some extraordinary changes are occurring, and are occurring at a very rapid pace. In 1913, 33% of the world’s population was located in Europe and North America; in 2003, it was 17%; and in 2050, it will be 12%1. In terms of economic production, in 1950, Europe and North America accounted for 68% of the world’s output; in 2003, that figure had become 57%; and, in 2050, we expect it to be 30%.2

The second very broad change in the world of innovation is the shift that we have seen occur to more open systems of innovation – the trend that is commonly referred to as “open innovation”. Whereas, in much of the 20th Century, we saw enterprises or institutions working in isolation on their own innovation needs, what we find increasingly at the beginning of the 21st Century is enterprises and institutions looking to collaborate with each other to satisfy their innovation needs. This change is occurring with (and, in part, because of) a number of other developments in the globalization of education, science and technology. For example, within the countries of the Organization of Economic Cooperation and Development (OECD), there are now three times as many foreign students as there were in 1985. We see that R&D is being delocalized around the world. There are a number of measures of that. And we see that, in terms of scientific output, i.e. scientific articles, 22% of them are internationally co-authored. So innovation, but more generally education and science, have become internationalized in a way that was simply not the case previously.

Let me make just three comments on the consequences of these changes in the area of innovation, given the importance of innovation to economic growth, job creation and social welfare.

In the first place, I believe that the changes illustrate the benefit of national innovation strategies. At WIPO, we emphasize the need for such strategies within the context of our development cooperation and capacity building activities and, in particular, in our Division for Certain Countries in Europe and Asia, which covers a geographical area that is roughly coterminous with the region covered by the ECE. We try to work with countries in the development of their own individual innovation and intellectual property strategies that correspond to their economic circumstances, objectives and priorities.

The second point that I should like to suggest to you is that government policy needs to embrace a total knowledge policy. Education is an indispensable basis that needs to be present before the question of the commercialization of knowledge can be considered. Intellectual property operates in this latter regard as the mechanism for translating knowledge into commercial assets. I would note here, in particular, the change that is occurring in the role of universities, which, increasingly, around the world are establishing their own technology-transfer or knowledge-transfer offices. Legislation is being enacted in many jurisdictions to facilitate this transfer to the productive sector of knowledge generated within universities and other government-funded research institutions. Universities have become major patent applicants. For example, if you were to include the University of California in the ranking of the numbers of international patent applications filed by all the enterprises and individuals resident in each country, last year it would have ranked as the 22nd largest filer of such applications. The University of California filed more international patent applications than 160 countries around the world. Universities have become the factories of the knowledge economy.

My final point is that connections and connectivity are obviously of primordial importance today. I have mentioned the sorts of connections that have occurred with the internationalization of education and scientific and technological production. The encouragement of these connections, which I imagine is very much part of the scope of the work of the Commission, with its emphasis on integration, is crucial for the sort of model of innovation that is emerging in the 21st Century.

Let me conclude by thanking the UNECE, once again, for the opportunity to be here this morning and also for the very good cooperation that exists between it and WIPO. We have been involved with the Commission’s work in Bishkek, Sochi, Astana and Minsk in the course of the last six to twelve months and, in the near future, we have joint programs planned in Kyrgyzstan, Serbia and Uzbekistan. This is a cooperation that we believe enables complementarities to come together in a very good synergy. We value it very much and I thank you very much.